Please note "BBC Sunday AM" must be credited if any part of this transcript is used.

Gordon Brown MP

ANDREW MARR:
[Following the weather forecast for lots of rain]

One of the things that means is that the Chancellor - prime minister in waiting - is going to have to go around with his umbrella on as he moves around the country meeting people and making his case.

Welcome.

GORDON BROWN:
I'll be in the open air today so it's going to be pretty wet.

ANDREW MARR:
Pretty wet down in Brighton later on. Let's start with the position of the party, because many people including Peter Hain have said that if things carry on as they have been you're going to lose the election - 500 councillors gone, lowest poll ratings, lowest voting never mind polls, real votes, for 20 years. It's a bit of a hole.

GORDON BROWN:
I don't think it's a hole, I think it's a challenge and I think the challenge of renewal is one that I relish, and I think it's the challenge that many people in the Labour Party will want to be engaged in. And look, what we're trying to do is meet the new challengers of the future. What we're recognising is that the world has changed since 1997.

If I was speaking to you in 1997 it would have been stability, investment, it would have been jobs. Today it's security, environment, it's global economic competition, it's building stronger communities. And I think the main argument that people I think are starting to understand is it requires a different kind of politics. You cannot solve the problems we face without involving and engaging the people of the country in the solution. And that means, you know, the environment, personal responsibility, it means insecurity, winning the battle of hearts and minds, involving people. It means in building communities people involved in stronger communities.

ANDREW MARR:
In your speech when you were announcing your candidacy you did say "more straightforwardness, more honesty" and all the rest. It was a bad kicking, wasn't it?

GORDON BROWN:
No, I don't think so.

ANDREW MARR:
No?

GORDON BROWN:
I don't think so. I think you've mid-term, you've got to learn from the results, you've got to listen and learn, and then you've got to build for the future. I mean, I accept we didn't do that well, I accept that we've got to do better. But equally I accept also that if we can put up policies and show that we're meeting the new challenges to the British people we will succeed. Look, I want a Britain of ambition and aspiration.

I want a Britain where there's no cap on talent, where there's no ceiling on how high people can rise, where there's no limit to how people can raise themselves and raise their families. And that's why, for example, I'm talking today about housing, new opportunities.

ANDREW MARR:
This is something that has kept a lot of people off the housing ladder, it's been a huge national problem. So if the papers are to be believed you want five eco towns, is that right, across the south?

GORDON BROWN:
When I was travelling round the country only in the last few days, it's very, very clear young couples finding it difficult to buy their first home, many people struggling to get into even rented accommodation at this stage. There is a housing problem that we've got to deal with and I'm going to set out the measures by which we will begin to solve that problem.

And one exciting development for the future is that we can combine the building of new houses with low carbon and carbon-free homes. Indeed we can combine the building of homes with building communities with combined heat and power, with a whole range of eco measures including better public transport, cycle lanes, that actually make it possible for us to have a very much higher quality of life in our new buildings and in our new towns. And that's what lies behind the proposal for eco towns. We think there could be five.

ANDREW MARR:
How many extra houses a year?

GORDON BROWN:
Well, in terms of houses a year, I want to get to us building 200,000 houses in total as quickly as possible.

Five years ago it was only 130,000, it's risen now, 160,000-170,000, we've got to get to 200,000 a year as quickly as possible, but of course that is a challenge in itself and the eco towns will make their contribution to it.

ANDREW MARR:
And as Prime Minister you would direct this to happen, even if a local authority, or area, said they didn't want a new town?

GORDON BROWN:
Well, one of the most interesting proposals that is now being developed is around Cambridge where it's all Ministry of Defence land that has been redeveloped.

And I think there are disused sites, many of them brownfield sites which are ripe for that sort of development. And I don't think there'll be any shortage of interest in people coming forward.

ANDREW MARR:
So you don't think local authorities are going to have this imposed on them?

GORDON BROWN:
Well I think there'll be quite an excitement in many local areas about the possibility of using some of the big brownfield sites, and particularly old disused sites, and developing an eco project around it.

And I think the great advantage is that you can plan the whole thing in the way that you have roads, you have bus routes, you have cycle lanes, and you also have your schools built in the most environmentally sustainable way, and all your community facilities with, perhaps combined heat and power, and other means by which energy can be brought to the community in a sustainable way.

ANDREW MARR:
If a local authority, almost certainly these days a Conservative local authority, says no, do you override them?

GORDON BROWN:
Well I think they've got to look at the plans as a whole. There is a planning system, we're trying to make it work more effectively, and of course you've got to recognise the local issues that are involved here.

But as I say, the sites that I'm thinking about, and the sites that I think will come forward are usually brownfield sites where actually there is redundant land...

ANDREW MARR:
OK.

GORDON BROWN:
...but it's in the interests of the whole community to develop.

ANDREW MARR:
Is there any difference between what you're saying now and what Yvette Cooper said a year ago?

GORDON BROWN:
Absolutely. All Yvette did a year ago was announce that there was one site that the Ministry of Defence said we're going to pass over for housing development.

This is a proposal that I've been working on in the last few months, working of course with the Housing Ministers, but at the same time it's quite new in the dimensions, it's quite new in also the imagination I think we have about combining the environment and the gains we can make in the environment with housing. But look, the aim is affordable housing, affordable housing for young people...

ANDREW MARR:
Sure.

GORDON BROWN:
...affordable housing for people who feel left out, and combines with that I may say, we also want to more about social housing. We've increased the amount of social housing being built by 50%.

ANDREW MARR:
Some would say...

GORDON BROWN:
But we want to do better.

ANDREW MARR:
Some would just say build more council houses, that's what Labour always used to do. Why not?

GORDON BROWN:
Well I think the social housing which is not just local authorities, but the Housing Associations, we will have to increase the numbers. There is a pent-up demand, more households are being created than there are houses for them.

I recognise that this is a challenge of modern society, where young people want to buy or rent their own homes a lot earlier than previously. We've got to make it possible for that to happen. And it shows that we are the party on the side, and the government on the side of people who have aspirations. You see, we used to talk about a property-owning democracy, it didn't reach large numbers of people...

ANDREW MARR:
You sound a bit like Margaret Thatcher!

GORDON BROWN:
Property-owning democracy, an asset-owning democracy. I would say a home-owning, asset-owning, wealth-owning democracy is what would be in the interests of our country.

Because everybody would have a stake in the country. But I also recognise that you've got to combine the building of houses for ownership with the building of houses for rent in a far more mobile and fluid society.

ANDREW MARR:
Would you feel offended if somebody said that sounds like Margaret Thatcher, the housing, would you think that was quite a good thing?

GORDON BROWN:
I think that every government over the last really 75 years has been faced with a housing challenge. It was after all in the 1950s that people started talking about...????

ANDREW MARR:
Harold MacMillan, a Conservative.

GORDON BROWN:
Harold McMillan. The problem is that even with the great ambitions of the 1950s or the 1980s they did not succeed in widening the scope for home ownership to large numbers of people who want it. And we have young people in their 20s and even their 30s, and older people who want to buy their own home, that have not got the chance to do so.

But we also need to build housing for rent. So it's a combination of housing for ownership and rent. But it does reflect how Britain is changing - people have higher aspirations, people's ambitions for themselves and their families are greater, children will have more options and choices in the future but I want these choices and options to be available to all young people.

ANDREW MARR:
Do you intend to take some of the powers, the so-called royal prerogative powers that would have traditionally been held by the occupant of No 10, and hand them to Parliament?

GORDON BROWN:
Yes. I think it's right to consider in the modern world how, if I'm talking about a constitution and a Britain where people are involved and engaged and people have the chance to participate and really be consulted on the big decisions that are happening, and that's fundamental to the way we've got to build for the future, then you've got to look at the old aspects of your constitution that no longer serve the purpose for which they were intended.

The royal prerogative is in fact now the Prime Minister's prerogative in certain areas, and I've said already in matters of the royal prerogative like the declaration of peace and war, like public appointments, and in other areas too such as the ministerial code, that we've got to make quite big changes. And I will make these changes and I will try to show people that this will be open and transparent and accountable government. And I will also try to show people that they can feel that they can be involved far more closely in how decisions are going to be made in the future.

ANDREW MARR:
And you're also, if I read this right, going to experiment with publishing proposed laws earlier to allow proper consultation and debate before you actually write down what you propose to legislate?

GORDON BROWN:
Well I think this is the heart of a modern democracy. The public will not support decisions unless they feel that they have been properly consulted and involved in the making of them.

And if you take the Queen's speech for example, now the Queen's speech comes normally in November, I think it's right to have a period of consultation on draft proposals for that Queen's speech, so that the public can make their views known and we can consider important items that have been...

ANDREW MARR:
Try and not make mistakes before it's too late?

GORDON BROWN:
And obviously what you want to do is to have a pre-consultative procedure that allows people to feel involved. Now that is the heart of a modern democracy moving forward.

ANDREW MARR:
Quite of lot of MPs say to me what we'd really like, apart from anything else, is a Prime Minister who was actually in the House of Commons quite a lot. Are you going to be there a lot?

GORDON BROWN:
I think I will be there a lot. Obviously I've got two young children and it's...

ANDREW MARR:
You're not going to be in the bar every night!

GORDON BROWN:
...it's important to be with them some of the time as well. But I think our democracy can be strengthened, and I think there is an energy in the country. You know, if you go round the country people are talking about being involved in meetings with the local police in a way that they never were before, the community comes out to these meetings.

The right to petition for changes, I think we need to be able to give people more power at a local level to do that. The right of community councils to have their own budgets. Young people having their own budgets to spend in a local area.

ANDREW MARR:
I think youre going too far there.

GORDON BROWN:
You've got teenage children but these are the things that will engage people in the democracy of a country, but also make for better decision-making.

ANDREW MARR:
OK. Let's talk about you. Because there are negatives as well as positives. One of the things that your critics say about you is that for all you say you want no spin, you want it to be straightforward, you want it to be honest, you've had a reputation for spinning yourself.

And perhaps the most clearest example of it, put it that way, recently, has been in the budget where you announced that you were going to get rid of the 10p rate which you'd introduced but you thought for reasons that you explained at the time, should be got rid of. And then right at the end of the budget speech you appeared to announce a 2p cut in taxes and all the papers, everybody went bananas, but of course it wasn't a real cut in taxes. With hindsight do you think that was a clever parliamentary trick which was too clever?

GORDON BROWN:
Well you can...

ANDREW MARR:
By half.

GORDON BROWN:
Well you can always look at how you present these things and I will also always learn lessons from it. But in fact...

ANDREW MARR:
Did you learn a lesson from that? It wasn't the finest moment was it?

GORDON BROWN:
No, the fact of the matter is I did announce the 10p change, I did announce all the other changes in taxation, and I did keep to the end the announcement of what it led to which was that that made it possible for us to cut the basic rate by 2p in the pound. So when people see their tax forms next years they will see that the basic rate of tax which was 22p, is actually down to 20p.

And that is the combined result of all the changes that we brought about, removing the 10p rate, making other changes in the way that we undertake our tax system, and we got then to the position where we are the government who achieved what others failed to achieve - to reduce the basic rate to 20p. That is a fact, the basic rate is down to 20p.

ANDREW MARR:
Sure - you're making the case for the budget. What I'm asking you about is the presentation of the budget. Because, I mean you know that first of all he's great, he's slashed tax by 2p, and then people did the numbers and it wasn't quite like that.

GORDON BROWN:
But Andrew, I think you're mistaken. I actually said at the beginning of the budget this is fiscally neutral budget, this is a budget that is not pumping money into the economy.

I then outlined all the changes. Perhaps, I would say the biggest change in corporation tax that we've had for 25 years, the biggest change in the income tax system for 20 years, now these are big changes and these are big changes that people will see happening when they get their tax returns.

ANDREW MARR:
Is it all presentation really?

GORDON BROWN:
Well I think people were, they were told at the beginning that this was a fiscally neutral budget, in other words there was no huge amounts of money being thrown about.

But the fact is we did put about £3 billion more into helping personal tax be reduced either through tax credits or through income tax. And I do feel that I've got to emphasise to you, because you seem not to accept this, that the basic rate of tax is cut from 22p to 20p, with all the other changes accompanying it.

ANDREW MARR:
I'm just thinking in the wallet it doesn't quite feel like that for a lot of people or it won't because of the other changes. Can I just move on to another thing that you said when you were launching your leadership, which was that you were going to learn from mistakes, that governments had to do, you were going to listen, you were going to go round the country listening and learning.

GORDON BROWN:
Of course.

ANDREW MARR:
People do want straight talking, a lot of people are quite cross with the government so what are some of the mistakes that you want to learn from?

GORDON BROWN:
Well, I've said before, I think, if you look back over the last ten years, what happened over the Dome was a mistake. I think the 75p pension rise, we could have done that far better and although we introduced a winter allowance, that £200, people thought in the end that pensioners should have done better. And I think on the Health Service, if you look at the Health Service, well I think in the way we report to Parliament, obviously I'm going to do better.

And I think on the Health Service despite all the great work that has been done to bring in the reforms we've still got a lot to do to show people that the Health Service is going to move into the modern era as a Health Service that is there for people when they need it. So I'm going to spend some time looking at how we can prepare the Health Service for the modern world in a way that I think both staff and the patients and the Health Service will find very attractive.

ANDREW MARR:
Do you think the way foundation hospitals we're introduced was, in retrospect, a mistake?

GORDON BROWN:
No, I don't think so. Not at all. I think that the worry about foundation hospitals is something that we've had to come back to again and again, and that is hospitals running up debts. And of course one of the problems we've had in recent years is the debts that have been held by some hospitals and authorities.

Now, that is an issue, it will always be an issue, but I think foundation hospitals actually have worked very well. I visited one only in the last few weeks and it is showing that you can do this with great local accountability, with local managers who're really keen to get things done, and with the consultants, the staff, all working well together. So I think the procedure by which we've got to more local accountability and more local autonomy is a good one.

ANDREW MARR:
Makes you sound very much like the current Prime Minister. Are you, as it were, a true pro-market Blairite then when it comes to the NHS?

Well, yes, I'm for an enterprise economy right across the board. I make no secret...

ANDREW MARR:
But not an enterprise NHS?

GORDON BROWN:
Well I make no secret of the fact that I don't think an economy in the modern world will succeed unless it's flexible, unless it's open, unless you've got great competition. As far as the Health Service is concerned, you've got to understand it, it's different from any other form of activity because you've got people who rely on the doctors for advice.

I can't normally diagnose myself. You've also got hospitals in an area that are essentially monopolies because they have Accident and Emergency and you're not going to find an Accident and Emergency facility very near to where you are, and you've got maternity services, you've got emergency services including the Accident and Emergency.

So healthcare is quite different from any other activity in the economy. And I think you've got to organise it in such a way that you recognise that, particularly in Britain where our principle is health according to need, the right to healthcare without having to pay according to need.

ANDREW MARR:
Any interest at all in actually making the Health Service independent?

GORDON BROWN:
I don't think independent is a word, the right word.

ANDREW MARR:
OK, let's move on. Because there's lots more to get through.

GORDON BROWN:
Why I say independent because at the end of the day ministers are going to have take some responsibility for the funding of the National Health Service. But what you want is the maximum local autonomy for your doctors and consultants and nurses and managers who are getting on with the job on a day-to-day basis of getting your hospitals working well.

ANDREW MARR:
All right. It looks very likely that Alex Salmond will form the next administration in Hollyrood. As Prime Minister will you work with him constructively?

GORDON BROWN:
Well, I don't want to presume anything because basically there's no vote, no vote taken. But one thing I would say is this, however people interpret the results of the election it is clear that two-thirds of the people of Scotland voted against separatist parties.

And two-thirds of the people of Scotland want to be part of the union. In fact, as the debate went on during that campaign it became very clear that people wanted to be part of the union, so I don't think anybody should misinterpret these results and I think it's important also to emphasise that I believe in the union, I believe that Britain is stronger together and we would be weaker apart.

ANDREW MARR:
All right. Speaking of elections, there are a lot of people who think there should be a general election, that the country has a right to decide who is the Prime Minister.

Now when you were asked about this before you said well I don't remember people saying back in 1990 that John Major should call a general election. As you know yourself, you called for a general election in 1990.

GORDON BROWN:
What I actually said Andrew was oppositions always do this. They always say, if you're in opposition, look it's time for an election.

ANDREW MARR:
So you were only kidding!

GORDON BROWN:
But, well, you will say that, you'll say that at most times if you're in opposition, it's time for an election, time for... but actually in practice I don't think the Conservatives in 1990 called for an election when John Major took over from Mrs. Thatcher. We're not a presidential system.

ANDREW MARR:
Finally, just a couple...

GORDON BROWN:
We're a parliamentary system.

ANDREW MARR:
A couple of things on the personal style. There are people out there worried that when Andrew Turnbull says Stalinist, when they read in today's papers that you've lifted Frank Field, I think it was, up by his lapels and gave him a shake, that this is the real Gordon Brown!

GORDON BROWN:
This is, this is not correct. I think I'm a conviction politician. I will tell people what I believe, I will argue my corner. But I've just described what I think is the style of governing for the modern world. And it's a style of government where you've got to involve, engage and consult. You've not only got to be more open, you've got to be out there in the country listening to what people say, on all the concerns that they have. And if I can achieve something I think

ANDREW MARR:
Is that a bit of a change in you though, because the Treasury job was different?

GORDON BROWN:
Of course the Chancellor's job's different because part of it is saying "no" to people when they come and ask for money. But I think as a Prime Minister or leader of a party, being out there in the country listening to people's concerns, showing that you are on people's side, understanding that some of the challenges are difficult but you can talk to people about how we can find a way through it, whether it's on housing, the Health Service or education. Because these are the big issues for people in our country. And defending and advancing the British way of life by working together on that, I think these are the most important issues.

ANDREW MARR:
The thing that a lot of people will remember about the launch was you announcing that you didn't want too much emphases on style and presentation, and then promptly disappearing behind an autoscreen so we couldn't see you. Was this deliberate or has somebody been taken out and shot?

GORDON BROWN:
It wasn't intended, no, I wanted to get my message across, not to be blotted out by a screen. And obviously that's one of the mistakes I'm going to have to learn from.

ANDREW MARR:
All right, Chancellor thank you very much indeed.

INTERVIEW ENDS

NB: this transcript was typed from a recording and not copied from an original script.

Because of the possibility of mis-hearing and the difficulty, in some cases, of identifying individual speakers, the BBC cannot vouch for its accuracy

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